Author Archive: Brett Owens

2024 is hours from heading out the door, and here’s the state of play:

The Federal Reserve cut interest rates for a third consecutive meeting on December 18. Yet the yield on the 10-year Treasury is now higher than when the easing cycle began.

Wait. What?

The bond market has been screaming at Jay Powell that the job on inflation is not done. It makes sense: The economy is fine. There are plenty of jobs. The market is not hurting for liquidity.

Finally, Jay is catching on. And here’s the twist: The hawkish guidance he gave on rates at that December 18 meeting—including the Fed’s expectation of two rate cuts next year instead of four—could actually set the stage for a top in the 10-year Treasury yield.… Read more

Need more dividend yield in 2025? Consider real estate investment trusts (REITs), which were literally mandated to be dividend-paying machines. Income is the point—by law.

Select REITs even yield 10% or more. What a payout! We’ll discuss seven of them—and their prospects for 2025—in a moment.

Now we can’t just blindly pick any ol’ a REIT. The real estate sector—using the Real Estate Select Sector SPDR (XLRE) as a proxy—only pays 3% right now.

But the average yield among this REIT 7-pack is 12.4%. That’s 4x what the sector pays!

That level of income would easily allow us to retire on dividends alone.… Read more

Merry Christmas, my fellow contrarian! Did Santa bring you a tax-advantaged dividend this morning?

The municipal bonds funding the Las Vegas Valley Nevada Water District would have made a great stocking stuffer. They yield 5% and get a tax hall pass from Uncle Sam. Which means on a tax equivalent basis they actually pay 6% or 7% or more, depending on your income tax bracket.

Vegas is booming. And the town is in the middle of a hot desert that is increasingly arid, so this muni is rock solid.

Five percent, tax free. Why’d you forget this, Santa?

Well fear not, my fellow “naughty lister.”… Read more

I think it’s clear by now that Trump 2.0 is going to look different from Trump 1.0.

Some areas, like tariffs, look similar to the first time around (though we expect more of them in the second term). Others are totally different. (Hands up if you had a potential crackdown on processed food by an RFK Jr.-led HHS on your bingo card.)

“Big Food” to Take a Hit, Fertilizer Stocks a Smart Buy in Trump 2.0

Let’s start with food stocks, which, as mentioned, are now a target for RFK Jr., should he be confirmed as HHS secretary. To be sure, that’s bad news for General Mills (GIS), which dropped following the election and again when RFK Jr.’s… Read more

The suits on Wall Street will say that $460K isn’t enough to retire on.

Well, that “modest” nest egg will earn $64,860 in dividends alone when invested in this simple 7-CEF portfolio.

CEFs are the code name for closed-end funds. They are a lesser-known cousin to exchange-traded funds (ETFs) and mutual funds. CEFs tend to have modest assets under management. Which is their superpower. Fewer assets mean greater yields!

Consider the 7-CEF portfolio we are about to discuss versus the standard high-yield stock benchmark ETF:

There is no comparison! But before we buy blindly, let’s do our homework and make sure these CEFs are not paper payout tigers.… Read more

I’d like to share my simple “Made for 2025” Dividend Plan with you. It’s a simple, safe strategy that identifies dividend stocks with payouts set to surge higher.

As these divvies pop, so do their associated stock prices.

The truth is, this proven system works no matter what the economy, or the Fed (or even the executive branch of the federal government!) is doing. It’s the path to peppy price gains from protected payers.

Let’s talk about a timely example—a dividend dip to enjoy! On the campaign trail, President-Elect Trump presented us with a pullback in perennial dividend grower Deere & Co (DE) thanks to these comments:

“They’ve announced a few days ago that they are going to move a lot of their manufacturing business to Mexico.

At times like these, I’m reminded of a quote from Howard Marks, the most successful value investor you’ve likely never heard of. (Warren Buffett is a fan.)

Marks’s monthly “Oaktree Memos” are well worth a read. And in his insightful book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, he wrote:

“What’s clear to the broad consensus of investors is almost always wrong.”

This quote has been on my mind lately because everyone is convinced that Trump 2.0 will lead to higher inflation.

I’m sure you can see where I’m going: Higher inflation begets higher interest rates.… Read more

Trump 2.0 will feature Wall Street-approved suit Scott Bessent as Treasury secretary. Bessent will advocate for financial deregulation and increased lending. Easier and faster money. Which will be a boon for private equity (PE) firms and business development companies (BDCs).

Today we’ll discuss seven BDCs yielding between 11.1% and 14.2%. They operate like PE shops—both will benefit from a friendly deal-making environment.

For our income investing purposes, we pick BDCs because it is easier to buy them.

We can buy BDCs individually as we would any stock. And BDCs can avoid taxes at the federal level by paying out at least 90% of their taxable earnings to shareholders in the form of dividends.… Read more

Are higher interest rates and lower bond prices a sure thing for 2025? Mainstream financial pundits say yes.

Which gives us thoughtful contrarians pause. Their narrative against bonds is assumed. When this happens, markets tend to move in the opposite direction of conventional wisdom.

Which means we should bet with bonds. At least in the near term to start the new year. Let’s watch bonds rally and surprise everyone except for us. The “Trump is bad for bonds” trade may eventually be correct, but my hunch again is that this “surefire” call is early.

For all the recent commotion, the 10-year Treasury yield bounces between 3.3% and 5%, with an even narrower 3.6% to 4.7% range recently.… Read more

We’re now well on our way to Trump 2.0, and I’m getting a lot of questions from readers about where things head from here.

I see the new administration as overall bullish for stocks. But the truth is, fortunes will be made in the next four years and, sadly, retirements will be lost.

My job is to keep you on the right side of the financial markets. One thing I can say is that the next four years will be challenging for two kinds of investors:

1. Buy-and-hold (or as I like to call them, “buy-and-hope”) types, and …
2. Those who sit in index funds like the SPDR S&P 500 ETF Trust (SPY).